“How did you choose Olhão?” is an all too common question we are asked by friends and other expats. We were looking back through our blog posts and realized that we never really answered that question here on FinazzoFun. I’m going to give the easy and mundane answer and then want to delve into our current thoughts about the city and the Algarve region in general. I’m going to dabble in some theorizing about why things are the way they are here and want to apologize in advance if I’m off target – feel free to share your thoughts in the comments!

Early November 2021 we both came to the conclusion that our retirement and move to Portugal which we initially planned for 2027 could happen sooner and that it was a necessary change for our well being. Once we made the decision to go, things happened very fast and the major obstacle quickly became the visa application process. One important difference 5-6 years would have made in our lives is that we may have only had two cats as we prepared to move, instead of our family of six.

In order to APPLY for the D7 visa in Portugal you need to have a finalized one year lease (or own property). Since we hadn’t ever been to Europe, we planned to rent in the event we found ourselves in a country that didn’t suit us. We contacted an agent to help us find a place to stay and told her our preferences. Back then we were considering places around the Silver Coast.

We knew major cities like Lisbon and Porto would be more expensive. The Eastern part of the country is more rural and would necessitate a higher language proficiency than we could hope to have before our move. We believed the Algarve was expensive and overrun by tourists.

Our agent found multiple places that seemed perfect but just didn’t work out for one reason or another. We actually had a lease and were about to sign for a rental house in Caldas da Rainha. Unfortunately when we asked for an amendment to the lease saying pets are allowed (they were listed as allowed in the online posting), the response we got was that animals were not allowed and our application was rejected. We had spent hours and hours sifting through real estate listings and our stress level was rising. Time was passing, Michelle had already retired, we were putting our house up for sale, and had an impending appointment to drop off our visa applications.

Desperation kicked in and we told our agent that we could make almost anything work for a year, “they just need to take us and four pets”. We could find a more fitting location at our leisure, which would be easier once we were already living in Portugal. The agent quickly gave us a list with our broadened parameters. We literally said any of them would work, but we thought one little house in Olhão looked like it would be the best fit based on the pictures and other details from the listing. Take a look for yourself HERE. Our application was accepted and that is how we ended up in a tiny city in the South of Portugal whose name we didn’t even know how to pronounce.

Olhão is a relatively “young” city by Portuguese standards with buildings dating back to the mid-1600’s. Although it is situated on the coast there is no direct beach access (you have to take a short ferry ride to get to the charming sandbar islands visible from the mainland). Because it lacks a beach and is a working fishing town it has, so far, avoided the crush of resort life found in nearby coastal cities. Tourist season still happens, but not nearly to the extent as some of the other Southern cities. The city proper has just over 14,000 residents and if you include the surrounding areas (the “county” would be comparable) the population is about 45,000.

In almost two years of living in the city we have made amazing friends, been showered with love and kindness from our neighbors, and found places which we will return to frequently whenever we visit the Algarve. We found an exceptional language teacher who is now one of our closest friends, in fact language classes have tied us to this region longer than we initially expected. “We can do anything for 1 year” morphed into a longer stay. Our concerns about meeting people, making friends, living in a Portuguese community, learning a new language, and navigating life in a foreign country have all been resolved. Unfortunately there are a handful of reasons this city (and the Algarve region in general) probably will not be a long term home for us.

When we arrived in Olhão on June 20th, 2022 and went to Café Bianca for the first time we met Paulo, one of our friends and neighbors who speaks English. Over time he explained that Olhão is at a crossroads and is in the throes of an identity crisis. Because it is not a town with direct beach access, many people from Portugal, the UK, France, and other European countries bought inexpensive vacation homes in Olhão when prices were more affordable (things weren’t too crazy here less than a decade ago). These were great investments because the residents were guaranteed sun for about 9-10 months per year and a very relaxed Portuguese community. Western Algarve towns have generally accepted their identity as resort communities while in the Eastern Algarve you will find more traditional towns. In Paulo’s opinion the city had maintained a balance which kept a population of full time residents even though the historical fishing and canning industries declined; but, he was confident the scale was going to tip one way or the other in the upcoming years.

The current mayor of Olhão has aggressively pushed to make the city more of a resort destination. A major hotel opened up and the city funded an expansion of the west side of the boardwalk which features extremely costly dining options – we don’t eat at these restaurants because the prices are so outrageous. This section of town also features new condominium complexes which have expanded rapidly while we’ve lived here. Before we arrived an investor bought about 1/5th of the OTHER side of the boardwalk and evicted all the business owners as they prepared to knock the existing structures down and build some type of resort/condo complex/hotel. This construction has been on hold due to various issues which means there is just a vacant stretch of nothing on the boardwalk in front of the ferry landing.

My barber, who has lived here his whole life, is concerned that the cost of living is rising too rapidly due to both worldwide inflation and local stores pricing higher to take advantage of tourists. He thinks a lot of locals won’t be able to afford to continue living here and believes that there may be an upcoming period of increased poverty and crime in the interim.

The population of the Algarve increases 10 fold from the off season to the summer months. As a resident you can see the scramble each June as the city hires a battalion of extra employees to do a hurried spring cleaning.

If you look at a list of Portuguese cities ranked by population you have to jump down to #19 to find Faro, the most populated city in the South. Because there aren’t many full time residents, many points of interest are spread out. Olhão doesn’t have a movie theater, we have to take a bus to get to Leroy Merlin or Ikea (which isn’t very useful considering the large items we’d be buying at either store), cultural events are spread out all over the region, but not consistently in a single city. Public transport is available but if we want to go to a concert in Tavira at night we will need to take a taxi, Uber, rent a car, or go with a friend. Staying in Olhão would necessitate the purchase of a car sooner than later.

It is said that federal funds are distributed disproportionately in favor of the North of Portugal. I don’t know if that is true, and even if it is, the North is the home of most industry and the majority of the population. Perhaps this accounts for the potential difference. What I do know is that the lack of financial support in the South is quite visible when you leave the tourist centric areas of the city. Sidewalks and roads are in dire need of repair, there seems to be constant battles to keep the septic and water systems patched up, nests of wires line the streets in the most chaotic fashion. Even heading south on the highway from Lisbon there is a point where you are entering the Algarve and the condition of the pavement is clearly deteriorated compared to the rest of the country.

Sidewalk waiting for repairs.

Nobody will deny that housing costs in the Algarve are out of control. We want more space and have decided that Portugal is the right place for us to live, but the options we have seen don’t match our budget. We hadn’t been actively house hunting, but one real estate add caught my eye.

It was a traditional stone house a couple of streets over from our current neighborhood, had quite a bit more space, an outdoor area for the dogs, and a massive rooftop terrace. After renting our house in Olhão, we have become partial to having a terrace. The price was €300,000 which seemed reasonable for the area. We scheduled a tour and managed the whole thing speaking only Portuguese. The house needed at least €50,000 in renovations, the kitchen was basically unusable, one bedroom had been built slapdash on the roof and was barely connected to the rest of the house. The building was configured in a way which would accommodate a duplex, but that would not be possible without the aforementioned renovations. The agent asked if we wanted to go for coffee and we took him up on the offer so we could find out about Portuguese real estate, taxes, and fees.

We asked some questions and the agent was forthright with his answers. Closing costs and taxes would be about €14,000. We also learned that in Portugal the idea of separate buyer and seller real estate agents is uncommon. He showed us some pictures of other properties he had sold nearby and our conversation drifted to Olhão. He had grown up in the North and moved to the Algarve because he loves the sun and beaches, he goes to the beach religiously every week. After talking a bit more he said something we’ve heard echoed over and over during our time in Olhão – that we might find a community that fits us better in the North of Portugal.

The gist of the concept is that Portuguese communities in the Algarve are friendly and inviting, but that it can be very hard to make more than superficial inroads into them. We have seen this play out in various ways during our time here.

• Our sweet neighbor brings us gifts all the time (tuna belly, fruit, vegetables, clothing, and cat food for example) but when invited in our house she refuses to step over the threshold.
• At an expat meetup a woman who was born and raised in Olhão had left the area for education and work. When she returned after many years, she felt compelled to turn to foreigners to make friends.
• We have been invited to two amazing community dinners with neighbors and are so grateful for the experience. We have attended countless Benfica games at the cafe and regularly exchanged food with neighbors. Beyond these examples, the majority of other interactions have been solely focused on doing favors for each other or short, casual conversations in the cafe.
• Our friends who grew up in the North swear that it is easier to make friends there and people’s doors are open to their neighbors. An invite to dinner is a natural thing if you are at someone’s house in the afternoon. We are missing game nights and dinner parties and would like to have Portuguese friends who would like to participate in these activities. This is not a critique of our expat friends.
• We have heard both Portuguese and non-Portuguese repeat the sentiment “the South is a closed community”. We can understand why this is the case. The Algarve has been host to visitors and vacationers for years and when the population is ever changing, family is the one thing you can consistently rely on. While we don’t fault our Portuguese friends in the South for having this perspective, we are searching for a more close knit community of friends.

We’ve traveled to Northern Portugal and enjoyed many of the cities we visited. Michelle grew up in Minnesota and I grew up in Alaska (after moving from Minnesota), so a climate similar to Portland doesn’t fill us with dread. The beaches in the Algarve are amazing, but in almost two years we’ve been only a handful of times. Before committing to buy a house here in Olhão, which isn’t quite right, we really need to evaluate our house hunting geographical criterion and contemplate what has become most important to us.